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07.27.10

Stephen McPherson Finally Out at ABC

Sources told The Daily Beast’s Peter Lauria in April that the ABC Entertainment chief was under fire; he resigned Tuesday amid stagnating numbers for the network and mutterings about his abrasive demeanor.

Back in April, three sources with direct knowledge of the situation told The Daily Beast that Disney CEO Robert Iger planned to spend the next few months focusing on the problems at ABC and on ABC Entertainment Group President Stephen McPherson’s personal performance.

“There’s no growth at ABC, they are stagnating, and at some point you stop being able to live with stagnation,” one former Iger colleague who talks with him regularly said at the time. It appears Iger’s thinking on McPherson is over: ABC confirmed Tuesday night that McPherson has resigned. Earlier in the day, Deadline Hollywood reported that “something’s going on” with the upper ranks at Disney and that he had been on vacation for several weeks and had not returned. McPherson was under fire at ABC, despite inheriting hit shows Lost and Grey's Anatomy from the former regime of Lloyd Braun and Susan Lyne and developing this year's breakout sitcom hit Modern Family.

The numbers tell part of the story. In 2004, the year McPherson took the reins, Lost made its debut, in lockstep with Desperate Housewives, Dancing With the Stars, and Grey’s Anatomy. ABC Entertainment broadcast revenue, which includes the ABC network, television stations owned by its parent company, and other items, jumped from $5.4 billion to $6.6 billion two years later. From there, however, revenue has steadily declined, and by the end of last year it had retreated to $5.7 billion, with another decline anticipated this year, as indicated by ABC News, which laid off 25 percent of its work force.

But a larger part of the story is personal. Known as an intense competitor, McPherson is famously abrasive and is universally regarded as one of the most disagreeable executives in Hollywood. His has icy relationships with producers, talent agents, and even the stars on his own shows, and there were many people within the Magic Kingdom and outside its walls who would love to see him fail. And that meant that the pressure was on McPherson, known for expletive-laced outbursts and an inability to take criticism. McPherson and his boss, Anne Sweeney, were known to dislike each other—he thinks she’s a suit; she thinks he’s out solely for himself, those who know them say—and there was little doubt that she would relish the opportunity to dismiss him with prejudice. (As one observer told New York magazine’s Vulture blog on Tuesday night, “Anne Sweeney finally got her way.”)

Although Iger is one of the few executives known to get along with McPherson—the two go biking together often—at Disney’s annual shareholder meeting in March, he gave McPherson a vote of no confidence.

The success this year of Modern Family, Castle, The Bachelor, and Dancing With the Stars masks deeper problems at the network. ABC lost more total viewers than any other broadcast network from 2006 to 2009, for instance, and the network ranks dead last among the four broadcast networks in ratings for the 18-49-year-old demographic.

Although Iger is one of the few executives known to get along with McPherson, at Disney’s annual shareholder meeting in March, he gave McPherson a vote of no confidence.

Further, for every new success on ABC’s schedule, there is a corresponding failure, such as Hank, Eastwick, and FlashForward.

Of McPherson, a friend who requested anonymity because of their personal relationship said back in April, “He’s hit a couple singles and doubles, but television is a home-run business, and everyone at Disney is waiting for him to hit the long ball.”

It appears they couldn’t wait any longer.

Caroline Linton contributed reporting.

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Peter Lauria is senior correspondent covering business, media, and entertainment for The Daily Beast. He previously covered music, movies, television, cable, radio, and corporate media as a business reporter for The New York Post. His work has also appeared in Avenue, Blender, and Media Magazine, and he's appeared on CNBC, Bloomberg, BBC Radio, and Reuters TV.